swing trading vs day trading

Don Bright · Jun 17, 2003

Again, somewhat more serious now: What really is "Swing Trading".....it's just day trading that didn't go too well....and the trader is praying for an additional "schwing baby"........

Trade enough to make a living, but not so much as to get eaten alive in costs. Heck, we just lowered the rates for the 2nd 1000 shares on every trade to help out.

Don't get me wrong.....I have positions on for days/weeks....but not in my "core stocks".....

Don

Merc · Jun 17, 2003

Quote from lindq:

However, from my personal experience you would do well to take a lot of Elder's writing to heart, as a similar approach has worked very well for me over the past few years.

Which Elder's book would you recommend?

reg · Jun 17, 2003

Quote from inandlong:

Here I have to respectfuly disagree. If you are able to carry 3-5 positions with 500 shares swingtrading, then you are in better shape than many, many other traders. And you can make an excellent living doing so.

That is, if all 3 - 5 positions make you money every time then you have a shot at it. Surely you must agree that once in a while something goes violently out of whack, something which will adversely affect your account. No problem at all if you have deep pockets; otherwise you'll be left with a smaller account to make up for a big hole.

downtickboy · Jun 17, 2003

I would assume that if you were swing trading that the profit target would be at least a point or two which I think is doable. On 500 shares a trade I would think you could make a pretty living.

As far as the comment from Don about swing trading I am surprised he has such a narrow mindset with trading considering he has been in the business a long time. I think there is a place for intraday trading, which I do because it can be consistent, but the big money is not in trading WMT for 20 cents.

lindq · Jun 17, 2003

Quote from Don Bright:

Again, somewhat more serious now: What really is "Swing Trading".....it's just day trading that didn't go too well....and the trader is praying for an additional "schwing baby"........
Don

Wrong. A day trade is a swing trade cut short by an anxious trader.

lindq · Jun 17, 2003

Quote from Merc:

Which Elder's book would you recommend?

Trading for a Living. A good investment for your library. Don't buy the workbook. It was put out by the publisher to capitalize on his first book.

Elder's approach and use of indicators is common sense. Buy good stocks on pullbacks in an overall uptrend, because even great stocks correct from time to time...set logical profit and loss limits...rely mainly on daily charts for setups with intraday charts for entry points...and keep an eye on the market environment. This approach should do very well over the next couple years as we move out of the valley.

RAMOUTAR · Jun 17, 2003

Quote from indioo:

from reading alexander elder's book he makes a interesting argument that very few day traders survive due to the channels on intraday charts not bieng high enough. However, swing traders could be profitable if he uses daily charts to buy and hold for a few days

do you guys agree? is it better for a beginner to formulate a swing trading strategy

After considering the amount of time you can devote to trading, the markets environment / temperament and the vehicles you trade dictate that. IN MY OPINION, it is absolutely silly to say that one timeframe is better over another. However, when someone makes a statement that one timeframe is better than another they should quantify it by referrring to the current market.

For example:

- from 1995-2000 it made more sense to daytrade and hold overnights

- it was much easier to daytrade before decimalization

- It was harder to daytrade from 3/00 - 4/03 than it is now

Frankly, I believe that if you can do both it's better. You can have swing trades in one account, and daytrade the same stocks in another account. Until something breaks out/down and follows through with a trend, there is much opportunity to day trade it's preceding range. Thus, the opportunity to both is there. You also need more tools for daytrading.

Good luck

Merc · Jun 17, 2003

Quote from lindq:

Trading for a Living. A good investment for your library. Don't buy the workbook. It was put out by the publisher to capitalize on his first book.

Elder's approach and use of indicators is common sense. Buy good stocks on pullbacks in an overall uptrend, because even great stocks correct from time to time...set logical profit and loss limits...rely mainly on daily charts for setups with intraday charts for entry points...and keep an eye on the market environment. This approach should do very well over the next couple years as we move out of the valley.

What about his second book:'Come into my trading room'
Is it just a repeat of his first book? Or worth reading as well?

Thanks for your help.

dotslashfuture · Jun 17, 2003

there are lots of books, but I like these:

TRADING RULES by Eng

and

TRADER VIC by Victor Sperandeo

By the way, practically every big trader that the general public has ever heard of could be classified as either Swing or Position traders, NOT daytraders.

jsemmel · Jun 18, 2003

I have consistantly made money swing trading and lost money intraday trading. I'm in my mid-50's <gasp> and dont have the energy and attentiveness needed for watching realtick every minute of the day.

observations:

in swing trading set several goals and cut your position size down as fast as possible and let the rest ride. This gives you some insurance against the dreaded gaps.

put your swing trading money in a separate account from your daytrading money and use a broker with $.01/share fees to cut down on commission costs

keep good records of the progress of all your setups on your watch lists, even the ones that don't trigger.

only swing trade trending stocks

Elder offers a basic course on CD-ROM that is pretty good for those of us who learn better by listening rather than reading.

good luck

Jeff